Investor Presentation August 2017 - Amazon S3 · offshore and deep sea drilling has been slower to...

© 2015 DMC. All rights reserved. INGENUITY IN ACTION.

Investor Presentation August 2017

DMCGlobal.com

DMCisadiversifiedtechnologycompany.Wearefocusedongrowingourcompanybyinves>nginpeople,productsandbusinessesthatservenicheglobalmarkets.Today,ourporBolioconsistsofNobelCladandDynaEnerge>cs,whichaddresstheindustrialprocessing,transporta>onandenergy

marketsthroughglobalmanufacturing,salesanddistribu>onnetworks.

2017InvestorPresenta>on 2

OURSTORY

DMCGlobal.com

SELECTDATA

BOOM$9.80–17.1927,410$209Million14.8Million14.0MillionDecember31$0.02$163.0Million$9.6Million

2017InvestorPresenta>on 3

Symbol(NasdaqGS):52-weekpricerange:Averagedailyvolume:Marketcapitaliza>on:Sharesoutstanding:Approximatefloat:Fiscalyear:Quarterlydividend:Revenue(bm):AdjustedEBITDA*(bm)

BOOM1-YearPrice&Volume

*Non-GAAPfinancialmeasure

DMCGlobal.com

REVENUEBYBUSINESS

2017InvestorPresenta>on

4

2015

(54%)

$76.9(46%)

NobelCladDynaEnerge>cs

$inmillions

$90.0

2016

(58%)

$67.3(42%)

$91.3

4

DMCGlobal.com

DMCEXECUTIVELEADERSHIP

2017InvestorPresenta>on 5

KEVINLONGE•  NamedPresident,CEOandDirectorinMarch2013

•  JoinedDMCasCOOinJuly2012

•  FormerVPandandGMofSonoco's$600millionProtec>vePackagingdivision

•  FormerPresidentofSonoco'sThermoSafeBrands

•  Oversawglobalsales,marke>ng,engineeringandR&Dforthelifesciences,medical,foodandindustrialdurablesmarkets

•  OversaweightmanufacturingcentersintheU.S.,EuropeandAsia

•  FormerPresidentofthreeopera>ngdivisionsatLydall,Inc.(NYSE-LDL)

President&CEO MICHAELKUTA•  JoinedDMCasCFOinMarch2014

•  FormerCorporateControlleratBerkshireHathaway’sLubrizolCorpora>on,aglobal,$6billionspecialtychemicalscompany

•  Wasresponsibleforbuildingandmanagingfinancialopera>onsforLubrizol’sdisbursedglobalopera>ons,includingaccoun>ng,consolida>onandfinancialrepor>ngfunc>ons,andoversightofinternalcontrols

•  Formerfinancialposi>onsofincreasingresponsibilityatLincolnElectricandEatonCorpora>on

CFO MICHELLESHEPSTON•  JoinedDMCin2016aper16yearswithDenver-basedDavisGraham&StubbsLLP

•  WasapartnerwithDGS,andprac>cedwiththeCorporateFinanceandAcquisi>onsGroup

•  Exper>seinsecuri>eslaw,mergers&acquisi>ons,crossborderdebt&equitytransac>ons,contractnego>a>onandexecu>on

•  Industryexper>seincludesenergyandnaturalresources

CLO GEOFFHIGH•  JoinedDMCinNovember2014aper21yearswithDenver-basedPfeifferHighInvestorRela>ons,Inc.

•  FormerpartnerwithPfeifferHigh,andoversawsmall-capandmid-cappublic-companyaccountsacrossmul>pleindustries.ManagedtheDMCaccountfor10years

•  Exper>seinins>tu>onal,analystandretailinvestorrela>ons;shareholderanalysisandtarge>ng;IRstrategydevelopmentandimplementa>on

•  Industryexper>seincludesoil&gasandindustrialinfrastructure

VP,IR

DMCGlobal.com

LEADERSHIPTEAM

2017InvestorPresenta>on 6

IANGRIEVESPresident,DynaEnerge>cs•  JoinedDynaEnerge>csin2013•  20yearsofdiverseopera>onal,engineering,financeandmanagementexperiencewithinterna>onalindustrialbusinesses

•  PreviouslySeniorVicePresidentofLydall,Inc.’sPerformanceMaterialsdivision

JOHNSCHEATZLEPresident,NobelClad•  JoinedDMCin2016aper19yearswithadvancedmaterialsmanufacturerMaterion

•  AsVicePresidentandGeneralManagerofMaterion’sPerformanceAlloysdivision,wasresponsibleformul>pleNorthAmericanproduc>onfacili>esandinterna>onalsalesanddistribu>oncenters

•  FormerGeneralManagerofMaterion’sCeramicProductsdivision

BINZHANGManagingDirector,China,DMC•  ResponsibleforChinesebusinessdevelopmentandmarketposi>oningforNobelCladandDynaEnerge>cs

•  Na>veofBeijingwith20yearsofseniorlevelbusinessexperience

•  EstablishedanAsiaPacificsalesandmarke>ngpresenceforaSheldahl,Inc.,aspecializedmanufacturerbasedinMinnesota

DMCGlobal.com

DMCempowersitspeopleandorganiza>onsbyins>tu>onalizingentrepreneurshipandcelebra>ngtechnicalingenuity.Ourgrowthisfueledbyenergized,relevantandnimblyexecutedsolu>onsthatmakearealdifferencetoourcustomers.DMC’sresponsiveorganiza>onsarefocusedon

servingtheworld’sgrowthmarkets,givinginvestorshighreturnsthroughoutvaryingeconomiccycles.

2017InvestorPresenta>on 7

OURCULTURE

DMCGlobal.com

CHAPTER&PAGETITLEHERE

2017InvestorPresenta>on 8

REPRESENTATIVE:NAME&POSITIONHERE

DMCGlobal.com

DYNAENERGETICSOVERVIEW

2017InvestorPresenta>on 9

Atop->erproviderofcompa>bilitytestedperfora>ngsystems.

AcquiredbyDMCin2007asnewplaBormbusiness

Unmatchedglobalreachservingaworldwidenetworkofoilandgasserviceproviders

Reputa>onforproductsafety,technicalinnova>onandsystemreliabilityunderextremeenvironmentalcondi>ons

Perfora>ngandwell-comple>ontechnologiesdriveimprovedsafety,produc>vityandloweropera>ngcostsforcustomers

DMCGlobal.com

PERFORATINGBASICS

2017InvestorPresenta>on 10

1.  Onceawellboreisdrilledandcementandsteelcasingareinplace,aperfora>nggunisdeployedintothewell.

2.  Theperfora>nggunisfired,sendingplasmajetsthroughthecasingandintothesurroundingforma>oncrea>ng“perfora>ontunnels”.

3.  Oilorgasflowsthroughtheperfora>ontunnelsandintothewell.

DMCGlobal.com 11

PRIMARYCOMPONENTSOFAPERFORATINGSYSTEM

2017InvestorPresenta>on

DynaEnerge)csistheonlycompanymanufacturingallcomponentsofaperfora)ngsystem

01SHAPEDCHARGES 02DETONATORS 03DETONATINGCORD

04GUNCARRIERS&“SUBS” 05CONTROLPANELS

DMCGlobal.com 12

DynaStage™Perfora>ngSystem•  Factoryassembled,performanceassured

•  IncorporatesDynaSelectintrinsicallysafe

detona>ngtechnology

•  Nowiringconnec>ons…reducesset-up>meto

seconds

•  Removesthepoten>alforelectricalconnec>on

errors

•  Eliminatesgunloadingsteps

•  Fullydisposableandmaintenancefree

DynaSelect™Detonators•  Integrated,intrinsicallysafe&selec>ve

technologies

•  Enablesconcurrentperfora>ngandfracturing

•  Reducestheriskofaccidents

•  Timeandcostsavingsfromsequen>algun

ini>a>on

•  Improvedset-up>mesandreliabilityfrom

fewerelectricalwiringconnec>ons

01 02

DYNAENERGETICSPRODUCTINNOVATIONS

2017InvestorPresenta>on

DynaSlot™WellAbandonmentSystem•  Fast,cost-effec>vealterna>vetotradi>onalplug

andabandonment,and“cementsqueeze”

techniques

•  Helicalpabernofoverlappinghorizontalslots

provides360-degreecementcoveragebehind

tubingorcasing

03

DMCGlobal.com

3-3/8”

3-1/8”

2-3/4”

DYNASTAGE™GUNSYSTEM

2017InvestorPresenta>on 13

*patentspendingTopFireDynaSelect

Detonator*Mul>tronicVFiringPanel

ThreeStageGunStringwithBridgePlug

DynaStageGunModule*

EcoilTandemSubAdapterQuickChangeGO-StyleFiringHead

TopFireDynaSelectDetonator

DMCGlobal.com

DYNASELECT™ANDDYNASTAGE™PROVIDEBUSINESSMODELADVANTAGE

2017InvestorPresenta>on

CURRENTINDUSTRYMODEL DYNAENERGETICSMODEL:PRODUCTBENEFITS+BUSINESSMODELADVANTAGE

DynaStageAdvantages•  Factoryassembledanddeliveredtocustomerinthefield•  Systemisarmeduponinstalla>onofDynaStageswitchdetonator,elimina>ngfieldwiring•  Surfacetesterensuressystemisfullyfunc>onalbeforedown-holedeployment

Benefits:•  Nomisfires,improvedreliability•  Reducedtransporta>oncostsandfieldlabor•  Noneedforgunassemblyorstoragefacili>es•  Simplifiedsupplychain•  Reducedworkingcapital,improvedprofitabilityforcustomers

CurrentProcessCustomermixes&matchesperfora>ngcomponentsfrommul>plesuppliers,thenassemblesandwiresguninthefield

Challenges:•  Assemblyerrorsleadtomisfires•  Quality&safety•  Opera>ngcost•  Complexityofsupplychain

14

DMCGlobal.com

DYNASTAGECASESTUDY:PATRIOTWELLSOLUTIONS

2017InvestorPresenta>on 15

Advancedwelldesigncalledfor15perfora>ngsystemsineach“gunstring,”3->mestheindustryaverage

DynaStagereducedgun-stringassembly>mebymorethan80%–from1.25hourstoapproximately13minutes–versusconven>onalgunsDynaStageenableda40%increaseincompletedstagesperdayGunfailureseffec>velyeliminatedGun-stringlengthreducedby14.5feet,or25%,versusconven>onalguns.Weightcutby400lbs,or40%.Comple>onteamsreducedfrom15to11membersPatriot’ssupplychainsimplified;vendorsreducedfrom3to1Patriotbenefizngfromlowerworkingcapitalrequirements,whicharenowaddressedbyDynaEnerge>cs

DynaStagewasadoptedbyPatriotWellSolu>onsinApril2017toaddressacomplex42-wellcomple>onprogramintheD-JBasin.

DMCGlobal.com

DYNAENERGETICSCAPITALIZINGONINDUSTRYTRANSITION

•  Aperahistoricdownturnintheenergyindustry,arecoveryhastakenholdintheonshoreunconven>onalmarket.Morecostlyoffshoreanddeepseadrillinghasbeenslowertorebound.

•  SpendingonNorthAmericanupstreamprojects,includingunconven>onaldrillingandwellcomple>ons,isexpectedtogrow38%in2017,whileinterna>onaloffshorespendingisexpectedtofall20%-25%in2017.

16

38%1

-23%2

-30%

-20%

-10%

0%

10%

20%

30%

40%

N.A. Upstream

Global Offshore

1 Oil & Gas Journal 2 Barclays

0

200

400

600

800

1000

1200

1400

1600

Q314Q414Q115Q215Q315Q415Q116Q216Q316Q416Q117Q217

Rig S tatis tic s

792 766 685 325

6/30/2017 40.7% 62.5% 143.7%

71 65 70 43

6/30/2017 110.8% 5.7% 51.2%

77 77 69 53

6/30/2017 0.0% 46.4% 45.3%

940 908 824 421

6/30/2017 42.3% 56.3% 123.3%

*Mos trecentdatareportedon30-J un-2017**% box s how s annualiz edrates forcomparis on

OriginalDataS ource:BakerHughes RigS tatis tic s

1Y earBefore

Direc tional

V ertical

TotalRig s

Horiz ontal

Mos tRecent*

1MonthBefore**

3Months Before**

-

200

400

600

800

1,000

1,200

1,400

1,600

7/23/2014

9/23/2014

11/23/2014

1/23/2015

3/23/2015

5/23/2015

7/23/2015

9/23/2015

11/23/2015

1/23/2016

3/23/2016

5/23/2016

7/23/2016

9/23/2016

11/23/2016

1/23/2017

3/23/2017

5/23/2017

Horizontal Directional Vertical

U.S.LandRigCount GlobalOffshoreRigCount 2017InvestmentForecast

2017InvestorPresenta>on

DMCGlobal.com

NORTHAMERICANUNCONVENTIONALMARKETLEADINGRECOVERY

17

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Non-U.S.wells N.A.Unconven>onal N.A.Conven>onal GlobalOffshore

2016

2017*

+52%

+6%

+2%

+1%

* World Oil and IHS forecasts

Forecastofwellsdrilled

2017InvestorPresenta>on

DMCGlobal.com

IMPROVEDECONOMICSOFUNCONVENTIONALOILANDGASPRODUCTION

18

85

63

56

75

5851

4743

51

373833 35

3932

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

PermianMidland PermianDelaware Niobrara EagleFord Bakken

2014 2015 2016

WellheadBreakevenPricesbyU.S.OnshorePlay$/Boe

Source:RystadEnergyNASWellCube&NASReport

2017InvestorPresenta>on

DMCGlobal.com 192017InvestorPresenta>on

DYNAENERGETICSPERFORMANCE

$inmillions

105.5

76.9 67.3

30.4

48.8

$0

$20

$40

$60

$80

$100

$120

2014 2015 2016 20166m 20176m

Sales

*Non-GAAPfinancialmeasure

1

1

22.4

8.1

2.5

2.1

5.9

$0

$5

$10

$15

$20

$25

2014 2015 2016 20166m 20176m

AdjustedEBITDA*

DMCGlobal.com 20

DYNAENERGETICS SALES BY GEOGRAPHY

2013Sales

UnitedStates/42%

Canada/14%

Russia/7%

Iraq/5%

India/5%

UnitedKingdom/4%

Kazakhstan/3%

RestofWorld/20%

2016Sales

UnitedStates/61%

Canada/13%

India/7%

Russia/5%

Egypt/3%

Ukraine/1%

Romania/1%

RestofWorld/9%

56% 74%

2017InvestorPresenta>on

DMCGlobal.com

SELECTENDUSERS

21

Thesemajorenergyservicecompaniesarebothcompe>torsandcustomers.Whendistribu>onlimita>onsinhibitthesecompanies’abilitytosupplyperfora>ngequipmenttocertaininterna>onalloca>ons,theyopenturntoDynaEnerge>cs.

*

2017InvestorPresenta>on

* *

* *

DMCGlobal.com

DYNAENERGETICSGROWTHINITIATIVES

2017InvestorPresenta>on 22

•  Con>nuetoinvestinresearchanddevelopmentofnext-genera>ontechnologies

•  Con>nuelaunchingnewproductsthatimprovecustomeropera>ngefficienciesanddrivedowncosts

•  Forgestrategicpartnershipstoenternewmarkets

•  Innovatecomprehensivesolu>onsthatmeetan>cipatedmarketdemand

DMCGlobal.com2017InvestorPresenta>on 23

DMCGlobal.com

NOBELCLADOVERVIEW

24

NobelCladistheworldwideleaderinexplosionweldedplateproduc>on.

LargestglobalsupplierofexplosioncladplatesServingadiversifiedrosterofindustrialandinfrastructureendmarkets.Workingtodriveengineeringspecifica>onsforcladProfi>ngfromglobalindustrialinfrastructureinvestmentsStrongfreecashflow

2017InvestorPresenta>on

DMCGlobal.com

97.1 90.0

91.3

51.5

37.3

$0

$20

$40

$60

$80

$100

$120

2014 2015 2016 20166m 20176m

Sales

NOBELCLAD’SPERFORMANCE

2017InvestorPresenta>on 25

$inmillions

15.4

10.7

12.9

7.6

4.7

$0

$5

$10

$15

$20

$25

2014 2015 2016 20166m 20176m

AdjustedEBITDA*

*Non-GAAPfinancialmeasure

DMCGlobal.com

ENGINEERINGPROCUREMENT&CONSTRUCTION(EPC)COMPANYBACKLOGINDEX

8/3/172017InvestorPresenta>on 26

InM illions o fUS D CummulativeCompanyBac klog -Index

69,815 76,505

*Quartertoquartergrow thratefor2Q17**Y eartoY eargrow thratefor2Q17

2Q17 1Q17* 2Q16**

Total

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Q3-2014

Q4-2014

Q1-2015

Q2-2015

Q3-2015

Q4-2015

Q1-2016

Q2-2016

Q3-2016

Q4-2016

Q1-2017

Q2-2017

The EPC Backlog Index is a cummulative summary of the backlog for f ive global companies that report quarterly backlog.

Company HeadquartersTechnipFMC LondonFluor USAKBR USAJacobs USASaipem Italy

DMCGlobal.com

2016Sales:$91.3Million

UnitedStates/42%

Canada/8%

UnitedArabEmirates/7%

China/7%

Germany/6%

France/4%

Australia/3%

Italy/3%

RestofWorld/20%

2017InvestorPresenta>on 27

NOBELCLADSALESBYGEOGRAPHY

DMCGlobal.com

EXPLOSIONWELDINGPROCESS

282017InvestorPresenta>on

DMCGlobal.com

DEMANDDRIVERSFOREXPLOSIONWELDING

29

03DesignFlexibility

02CorrosiveEnvironments

01GlobalInfrastructureInvestment

2017InvestorPresenta>on

DMCGlobal.com

NOBELCLAD’SCOMPETITIVEADVANTAGE

2017InvestorPresenta>on 30

•  Globalnetworkofspecialtymetalsproviders

•  Permitsandshoo>ngsitesinU.S.,France,andGermany

•  Masteryofexplosion-weldingprocessforlarge-scaleproduc>on

•  Strongworkingrela>onshipswithend-marketcustomers

NobelClad’sdominantposi>onintheexplosionweldingindustryisprotectedbysignificantbarrierstoentry.

Titaniumcladpressurevessels–imagecourtesyofCoekEngineering.

DMCGlobal.com

NOBELCLADGROWTHINITIATIVES

2017InvestorPresenta>on 31

•  ExpandingmarketshareinAsia

•  R&Dfocusedonnewcladplateapplica>ons

•  Applyingprocessexper>setonewmarketdevelopment

•  Strengtheningglobalsalesforcewithaddi>onofend-marketexperts

•  Expandingproduc>oncapabili>eswithnewEuropeanmanufacturingfacility

Separa>ngequipment–Anaturalgasproduc>onfacilitywhereNobelClad’sexplosionweldedplateswereusedinthefabrica>onofspecializedpipes.

DMCGlobal.com

PRIMARYENDMARKETSSERVED

2017InvestorPresenta>on 32

•  Chemical

•  OilandGas

•  MetalsandMining

•  Marine

•  PowerGenera>on

•  Alterna>veEnergy

•  IndustrialRefrigera>on

•  Transporta>on

•  DefenseandProtec>on

DMCGlobal.com

SELECTENDUSERS

33

Chemicals Refining Mining Engineering

2017InvestorPresenta>on

NobelCladprovidesvaluetoitsindustrialandinfrastructurecustomersbycollabora>ngateverystageofdevelopment.Duringdesignphases,NobelCladisakeyresourceforprocessarchitectsandengineerswhoopenwriteNobelCladplatesintotheirmanufacturingspecifica>ons.

DMCGlobal.com

FINANCIALPERFORMANCEREVIEW

2017InvestorPresenta>on 34

($MMexceptpershareamounts) 2014 2015 2016 166M 176M

Sales%growth

$202.60%

$166.9-18%

$158.6-5%

$81.8-4%

$86.25%

GrossProfit%margin

$61.430%

$35.621%

$38.724%

$20.325%

$24.428%

Opera>ngProfit(Loss)*%margin

$14.77%

($0.0)0%

($5.2)-3%

($.09)-1.1%

($0.32)-0.4%

Income(Loss)fromCon>nuingOpera>ons(apertax)* $1.9 ($8.0) ($8.2) ($2.4) ($0.6)

DilutedEPSfromCon>nuingOpera>ons* $0.13 ($0.57) ($0.58) ($0.17) ($0.04)

AdjustedEBITDA*%margin

$31.516%

$13.18%

$9.06%

$6.328%

$6.898%

*Non-GAAPfinancialmeasures

1

DMCGlobal.com

BALANCESHEETHIGHLIGHTS

2017InvestorPresenta>on 35

Assets($MM) December31,2016 March31,2017

Cash,cashequivalents $6.4 $8.6

Accountsreceivables,net $33.0 $38.6

Inventory $28.8 $30.9

Totalcurrentassets $73.4 $83.8

Totalassets $162.6 $173.9

Liabili>es($MM)

Totalcurrentliabili>es $30.7 $29.0

Linesofcredit $15.7 $23.9

Long-termdebt $0.0 $0.0

Totalliabili>es $50.1 $56.9

Totalstockholders’equity $112.4 $117.0

Totalliabili>esandstockholders’equity $162.6 $173.9

DMCGlobal.com

DMC’SPERFORMANCETENETS

2017InvestorPresenta>on 36

Throughshareownership,DMCmanagementhascloselyaligneditsinterestwithindependentshareholders,andallmanagementdecisionsaremadetomaximizeshareholdervalue.

DMChasadoptedthreetenetstoguidesuperiorsharepriceperformance:

1.  Maximizefreecashflowthroughfinancialdiscipline

2.  Maximizereturnoninvestedcapitalbyachievingopera>onalexcellenceandmakingdiscerninginvestmentdecisions

3.  Investinnewtechnology,productandmarketdevelopmenttodrivesustainedgrowthandincreasedprofitability

DMCGlobal.com

CONTACTINFORMATION

2017InvestorPresenta>on 37

DMC5405SpineRoadBoulder,Colorado80301,USAT800-821-2666

GeoffHighVicePresidentofInvestorRela>onsEghigh@dmcglobal.comT303-514-0656

Contact PrimaryContact

DMCGlobal.com

APPENDIX:USEOFNON-GAAPFINANCIALMEASURES

8/3/17Presenta>onTitle 38

APPENDIX:USEOFNON-GAAPFINANCIALMEASURES

DMCGlobal.com 382017InvestorPresenta>on

AdjustedEBITDAanddilutedEPSarenon-GAAP(generallyacceptedaccoun>ngprinciples)financialmeasuresusedbymanagementtomeasureopera>ngperformance.Non-GAAPresultsarepresentedonlyasasupplementtothefinancialstatementsbasedonU.S.generallyacceptedaccoun>ngprinciples(GAAP).Thenon-GAAPfinancialinforma>onisprovidedtoenhancethereader'sunderstandingofDMC’sfinancialperformance,butnonon-GAAPmeasureshouldbeconsideredinisola>onorasasubs>tuteforfinancialmeasurescalculatedinaccordancewithGAAP.Reconcilia>onsofthemostdirectlycomparableGAAPmeasurestonon-GAAPmeasuresareprovidedwithintheschedulesabachedtothisrelease.EBITDAisdefinedasnetincomeplusorminusnetinterestplustaxes,deprecia>onandamor>za>on.AdjustedEBITDAexcludesfromEBITDAstock-basedcompensa>on,restructuringandimpairmentchargesand,whenappropriate,otheritemsthatmanagementdoesnotu>lizeinassessingDMC’sopera>ngperformance(asfurtherdescribedintheabachedfinancialschedules).Noneofthesenon-GAAPfinancialmeasuresarerecognizedtermsunderGAAPanddonotpurporttobeanalterna>vetonetincomeasanindicatorofopera>ngperformanceoranyotherGAAPmeasure.

Managementusesthesenon-GAAPmeasuresinitsopera>onalandfinancialdecision-making,believingthatitisusefultoeliminatecertainitemsinordertofocusonwhatitdeemstobeamorereliableindicatorofongoingopera>ngperformance.

Asaresult,internalmanagementreportsusedduringmonthlyopera>ngreviewsfeaturetheadjustedEBITDA.Inaddi>on,certainmanagementincen>veawardswerebased,inpart,ontheamountofadjustedEBITDAachievedduringtheyear.Managementalsobelievesthatinvestorsmayfindnon-GAAPfinancialmeasuresusefulforthesamereasons,althoughinvestorsarecau>onedthatnon-GAAPfinancialmeasuresarenotasubs>tuteforGAAPdisclosures.EBITDAandadjustedEBITDAarealsousedbyresearchanalysts,investmentbankersandlenderstoassessopera>ngperformance.Forexample,ameasuresimilartoEBITDAisrequiredbythelendersunderDMC’screditfacility.Becausenotallcompaniesuseiden>calcalcula>ons,DMC’spresenta>onofnon-GAAPfinancialmeasuresmaynotbecomparabletoothersimilarly>tledmeasuresofothercompanies.However,thesemeasurescans>llbeusefulinevalua>ngthecompany’sperformanceagainstitspeercompaniesbecausemanagementbelievesthemeasuresprovideuserswithvaluableinsightintokeycomponentsofGAAPfinancialdisclosures.Forexample,acompanywithgreaterGAAPnetincomemaynotbeasappealingtoinvestorsifitsnetincomeismoreheavilycomprisedofgainsonassetsales.Likewise,elimina>ngtheeffectsofinterestincomeandexpensemoderatestheimpactofacompany'scapitalstructureonitsperformance.

Alloftheitemsincludedinthereconcilia>onfromnetincometoEBITDAandadjustedEBITDAareeither(i)non-cashitems(e.g.,deprecia>on,amor>za>onofpurchasedintangiblesandstock-basedcompensa>on)

or(ii)itemsthatmanagementdoesnotconsidertobeusefulinassessingDMC’sopera>ngperformance(e.g.,incometaxes,restructuringandimpairmentchargesandgainonsaleofassets).Inthecaseofthenon-cashitems,managementbelievesthatinvestorscanbeberassessthecompany’sopera>ngperformanceifthemeasuresarepresentedwithoutsuchitemsbecause,unlikecashexpenses,theseadjustmentsdonotaffectDMC'sabilitytogeneratefreecashfloworinvestinitsbusiness.Forexample,byadjus>ngfordeprecia>onandamor>za>onincompu>ngEBITDA,userscancompareopera>ngperformancewithoutregardtodifferentaccoun>ngdetermina>onssuchasusefullife.Inthecaseoftheotheritems,managementbelievesthatinvestorscanbeberassessopera>ngperformanceifthemeasuresarepresentedwithouttheseitemsbecausetheirfinancialimpactdoesnotreflectongoingopera>ngperformance.Wehavealsopresentedcertainfinancialmeasuresexcludingcertainone->me,non-recurring“specialitems,”includingouraccruedan>-dumpingdu>es,inventoryreserveadjustment,thenon-cashgoodwillimpairmentchargeandrestructuringcharges.Thesearenon-GAAPfinancialmeasureswhenthespecialitemsareexcluded.Webelievetheseareimportantsupplementalmeasuresbecausetheyeliminateone->me,non-recurringitemsthathavelessbearingonouropera>ngperformanceandsohighlighttrendsinourbusinessthatmaynototherwisebeapparentwhenrelyingsolelyonGAAPfinancialmeasures.Wehavequan>fiedthosespecialitemsearlierinthisrelease,orimmediatelyfollowing,thefinancialmeasuresthatexcludedthespecialitems,toallowreaderstomeasuretheirimpact.

DMCGlobal.com

RECONCILIATIONSOFNON-GAAPFINANCIALMEASUREMENTS–DYNAMICMATERIALSEBITDAANDADJUSTEDEBITDA

2017InvestorPresenta>on 39

($MMexceptpershareamounts) 2014 2015 2016 166M 176M

Netincome(loss)abributabletoDMC $2.6 $(24.0) $(6.5) $(1.2) $(2.8)

Incomefromdiscon>nuedopera>ons $(0.6) — — — —

Interestexpense $0.6 $1.7 $1.1 $0.6 $0.8

Interestincome $0.0 $0.0 $0.0 $0.0 $0.0

Incometaxprovision(benefit) $3.9 $(2.1) $0.8 $0.0 $1.1

Deprecia>on $7.1 $6.2 $6.8 $3.3 $3.4

Amor>za>on $6.1 $4.0 $4.0 $2.0 $2.0

EBITDA $19.7 $(14.1) $6.2 $4.7 $4.5

Restructuring $6.8 $4.1 $1.2 $0.8 $0.5

Accruedan>-dumpingdu>es — $6.2 — — —

Goodwillimpairmentcharges — $11.5 — — —

DynaEnerge>csinventoryreserves $1.3 $1.9 — — —

Stock-basedcompensa>on $3.6 $2.8 $2.3 $1.1 $1.4

Other(income)expense,net $0.3 $0.7 ($0.6) ($0.3) $0.5

AdjustedEBITDA $31.7 $13.0 $9.1 $6.3 $6.9

DMCGlobal.com

RECONCILIATIONSOFNON-GAAPFINANCIALMEASUREMENTS-DILUTEDEPSFROMCONTINUINGOPERATIONS

2017InvestorPresenta>on 40

($MMexceptpershareamounts) Pre-tax Tax Net DilutedEPS

YearendedDecember31,2014

Netincomefromcon>nuingopera>ons,asreported $13.9 $6.0 $(7.9) $(0.57)

Restructuringprograms:

NobelClad $(6.8) $(1.6) $(5.2) $(.38)

DynaEnerge>cs — — — —

Corporate — — — —

Accruedan>-dumpingdu>es — — — —

Goodwillimpairmentcharge — — — —

DynaEnerge>csinventoryreserves $(1.3) $(0.5) $(0.8) $(0.6)

Netincomefromcon>nuingopera>ons,excludingcharges $5.8 $3.9 $1.9 $0.13

DMCGlobal.com

RECONCILIATIONSOFNON-GAAPFINANCIALMEASUREMENTS-DILUTEDEPSFROMCONTINUINGOPERATIONS

2017InvestorPresenta>on 41

($MMexceptpershareamounts) Pre-tax Tax Net Diluted

EPS Pre-tax Tax Net DilutedEPS

SixmonthsendedJune30,2016 SixmonthsendedJune30,2017

Netincome(loss),asreported $(1.1) $0.00 $(1.2) $(0.08) $(1.70) $1.10 $(2.80) $(0.20)

Restructuringprograms:

NobelClad — — — — — — — —

DynaEnerge>cs $(0.80) $(0.30) $(0.50) $(0.04) $(0.50) — $(0.50) $(0.03)

Corporate $(0.1) — $(1.10) — — — — —

Accruedan>-dumpingdu>es — — — — — — — —

Goodwillimpairmentcharge — — — — — — — —

DynaEnerge>csinventoryreserves — — — — — — — —

Netincome(loss),excludingcharges $(0.3) $0.3 $(0.6) $(0.04) $(1.20) $1.1 $(2.30) $(0.17)

DMCGlobal.com

RECONCILIATIONSOFNON-GAAPFINANCIALMEASUREMENTS-NOBELCLADEBITDAANDADJUSTEDEBITDA

2017InvestorPresenta>on 42

($MMexceptpershareamounts) 2014 2015 166M 176M

Opera>ngincome $2.2 $5.8 $2.7 $5.6

Deprecia>on $4.6 $3.8 $1.8 $1.8

Amor>za>on $1.9 $0.4 $0.2 $0.2

Restructuring $6.8 $0.8 — —

AdjustedEBITDA $15.5 $10.8 $4.7 $7.6

DMCGlobal.com

RECONCILIATIONSOFNON-GAAPFINANCIALMEASUREMENTS-DYNAENERGETICSEBITDAANDADJUSTEDEBITDA

2017InvestorPresenta>on 43

($MMexceptpershareamounts) 2014 2015 166M 176M

Opera>ngincome(loss) $14.5 $(19.2) $(2.0) $2.0

Deprecia>on $2.5 $2.5 $1.5 $1.6

Amor>za>on $4.2 $3.7 $1.8 $1.8

Netincomeabributabletonon-controllinginterest — — — —

Restructuring — $1.7 $0.8 $0.5

Goodwillimpairmentcharges — $11.5 — —

Accruedan>-dumpingdu>es — $6.2 — —

DynaEnerge>csinventoryreserves $1.3 $1.9 — —

AdjustedEBITDA $22.5 $8.1 $2.1 $5.9

DMCGlobal.com

APPENDIX:USEOFNON-GAAPFINANCIALMEASURES

8/3/17Presenta>onTitle 44

**NOTEREGARDINGIHSMATERIAL

DMCGlobal.com 442017InvestorPresenta>on

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